Demings 14 points

1. Management Commitment--Making a commitment to drive improvement within

an organization is still difficult for managers. Even though managers have
conducted a thorough assessment of their organization and know what they need
to change, many do not effectively follow up on opportunities. Reasons range
from denial to excuses. Effective leadership begins with commitment.
2. Learn the new philosophy--Deming recognized that historical methods of
management built on early twentieth-century principles of Frederick Taylor, such
as quota-driven production, work measurement, and adversarial work
relationships, simply dont work. Although leadership begins with commitment, it
also requires new ways of thinking. Today, many companies have adopted the
principles of TQ. However, people change jobs and organizations generally have
a short memory--both need to continually renew themselves to learn new
approaches and relearn many older ones. Todays new philosophies include the
Baldrige framework and Six Sigma
3. Understand Inspection--In the mid-twentieth century, inspection had been the
principal means for quality control; companies employed dozens or even
hundreds of people who inspected for quality on a full-time basis and added little
value to the product. Deming suggested that inspection should be used
judiciously as an information-gathering tool for improvement. Today, this new role
of inspection has been integrated into the quality management practices of most
companies. However, few managers truly understand how variation affects their
processes and inspection practices. Through better understanding, managers
can eliminate unnecessary inspection, thus reducing non-value-add costs, or
perform critical inspection tasks that avoid more expensive downstream repairs.
4. End Price Tag Decisions--Purchasing decisions traditionally have been driven by
cost through competitive bidding, not by quality. Costs due to inferior materials
and components increase costs in later stages of production and can far exceed
the savings realized through competitive bidding. Deming promoted the
recognition of purchasing departments as internal suppliers to production, and
urged businesses to establish long-term relationships with a few suppliers,
leading to loyalty and enhanced opportunities for improvement. Todays
emphasis on supply chain management (SCM) reflects the achievement of Point
4. SCM focuses heavily on a systems view of the supply chain with the objective
of minimizing total supply chain costs and developing stronger partnerships with
suppliers.
5. Improve Constantly--Traditionally, continuous improvement was not a common
business practice; today, it is recognized as a necessary means for survival in a
highly competitive and global business environment. Improvments are necessary
in both design and operations. Improved design of goods and services comes
from understanding customer needs and continual market surveys and other
sources of feedback, and from understanding the manufacturing and service
delivery process. Improvments in operations are achieved by reducing the
causes and impacts of variation, and engaging all employees to innovate and
seek ways of doing their jobs more efficiently and effectively. The tools for
improvement are constantly evolving, and organizations need to ensure that their
employees understand and apply them effectively, which requires training, the
focus of the next Point.
6. Institute Training--People are an organizations most valuable resources; they
want to do a good job, but they often do not know how. Not only does training
result in improvements in products and service quality and organizational

performance, but it adds to worker morale, and demonstrates to workers that the
company is dedicated to helping them and investing in their future. Training must
transcend such basic job skills as running a machine or following the script when
talking to customers. Training should include tools for identifying, diagnosing,
analyzing, and solving quality and performance problems. Today, many
companies have excellent training programs for technology related to direct
production but still fail to enrich the ancillary skills of their workforce. Here is
where some of the most lucrative opportunities exist to make an impact on key
business results.
7. Institute Leadership--The job of management is leadership and guidance, not
supervision and work direction. Supervisors should be coaches, not policemen,
and supervision should provide the link between management and the workforce.
Leadership can help to eliminate fear can encourage teamwork. Leadership was,
is and will continue to be a challenging issue in every organization, particularly as
new generations of managers replace those who have learned to lead. Thus this
Point of Demings will always be relevant to organizations.
8. Drive Out Fear--Fear in work manifests in many ways: fear of reprisal, fear of
failure, fear of unknown, fear of change. Fear encourages short-term, selfish
thinking, not long-term improvement for the benefit of all. Fear is a cultural issue
for all organizations. Creating a culture without fear is a slow process but can be
destroyed in an insistent with a transition of leadership and a change in corporate
policies. Therefore, todays managers need to continue to be sensitive to the
impact that fear can have on their organizations. Positive motivation will be
studied in Chapter 9.
9. Optimize Team Efforts--Barriers between individuals and departments lead to
poor quality because customers do not receive what they need from their
suppliers. This is often the result of internal competition for raises or
performance ratings. Teamwork helps to break down barriers between internal
customers and suppliers. The focus should be on meeting customer needs and
improving processes. Teamwork is an important means of achieving a companys
goals, and we discuss this further in Chapter 8.
10. Eliminate Exhortations--Motivation can be better achieved through trust and
leadership than slogans. Slogans calling for improved quality usually assume that
poor quality results from a lack of motivation. Workers cannot improve solely
through motivational methods when the system in which they work constrains
their performance. On the contrary, they will become frustrated and their
performance will decrease further. Improvement stems from better organizational
design and use of data-driven processes.
11. Eliminate Quotas and MBO(Management by Objective)--Numerical quotas
encourage short rather than long-term behavior, particularly if rewards or
performance appraisals are tied to meeting quotas. Deming acknowledged that
goals are useful, but numerical goals set for others without incorporating a
method to reach the goal generate frustration and resentment. Furthermore,
variation in the system year-to-year or quarter-to-quarter--a 5 percent increase or
6 percent decrease, for example--makes comparisons meaningless.
Management must understand the reasons for variation or poor performance and
provide the means to improve, rather than focus on short-term goals.
12. Remove Barriers to Pride in Workmanship--Some organizations view workers as
a commodity. Factory workers are given monotonous tasks; provided with
inferior machines, tools, or materials; told to run defective items to meet sales
pressures; and report to supervisors who know nothing about the job. This

attitude has given way to increased levels of empowerment, providing workers

with a sense of ownership of their work processes and higher self-esteem. This
will be explored further in Chapter 9.
13. Institute Education--Training in Point 6 refers to job skills; education refers to
self-development. Firms have a responsibility to develop the value and self-worth
of the individual. Investing in people is a powerful motivation method. Today,
many companies understand that elevating the general knowledge base of their
workforce--outside of specific job skills--returns many benefits. However, others
still view this task as a cost that can be easily cut when financial tradeoffs must
be made.
14. Take Action--Any cultural change begins with top management and includes
everyone. Changing an organizational culture generally meets with skepticism
and resistance that many firms find difficult to deal with, particularly when many
of the traditional management practices Deming felt must be eliminated are
deeply ingrained in the organizations culture. We address this further in Chapter
11.